A 50-state insurance report card discussing the impact of state insurance regulation on consumers, lawmakers and the insurance industry gives Florida an “F”. The report card, undertaken by The Heartland Institute, a free market economic research organization, found that there is political manipulation of insurance rates, resulting in lack of competition and over-regulation of the insurance market in Florida.
Eli Lehrer, director of The Heartland Institute’s Center on Risk, Regulation and Markets, in releasing the report card today said that, “The legislature is moving in the right direction. In the past year, Florida’ insurance environment has gone from really, really awful to only awful. But it still isn’t enough to give the state a grade any higher than “F”. Florida consumers simply don’t get treated well in the current environment.”
The results contained in the report card are based on a detailed analysis of 11 variables, including the political and regulatory environments in each state and market volatility, among others. The report assigns positive or negative points based on the different variables and how the state is performing in those areas. Scores are calculated for every state by adding all variables and calculating a standard deviation from the mean. Consumer-related issues are heavily weighted.
The report card discusses the political manipulation of insurance rates, which results in lack of competition and innovation, as seen in Florida. It also discusses the over-regulation of the insurance market in Florida, which has reduced the amount of private capital available to pay claims when a storm hits. Florida received an overall score of -36, resulting in an “F” grade. Key contributors to the low score were the regulatory environment (-20), the lack of any private insurers writing policies in some regions of the state, (-10) and political considerations (-6).
“It’s not surprising that Florida received an F for its insurance market. Our property insurance system is significantly flawed, and legislators are working very hard this session to make improvements to the system,” said State Representative Janet Long.
The Heartland Institute’s 50-State Report Card will be released in the coming weeks.
